Active ETFs Lag Behind Expectations Despite Increase in Listings in Korea
The South Korean equity market has recently seen a surge in the listing of active Exchange-Traded Funds (ETFs), but their overall performance has fallen short of industry expectations. Notably, most of these active ETFs have portfolios heavily weighted toward small- and mid-cap stocks, which has resulted in lackluster returns compared to their benchmark indices during recent periods of market volatility.
This underperformance is further compounded by relatively high management fees, fueling growing discontent among investors. Many investors, who had anticipated higher returns, are expressing concerns over the combination of lower-than-expected profits and elevated costs. However, in the medium to long term, should market conditions stabilize and small- and mid-cap stocks recover, the unique strengths of active ETFs could once again come to the forefront.
Related News
Active ETFs can't perform in volatile marketsFocused on mid and small caps, underperforming despite high fees as returns lag behind the benchmark. ▲Yeouido Stock Market (Getty Images Bank) Active ETFs this year
Active ETFs Struggle in Volatile Market - E-TodayActive ETFs underperform with declines as heavy weighting to mid and small-cap stocks. They fall behind basic index returns despite high fees, with poor performance being reported from Yeouido Securities firms (Getty Images Bank).